UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q


       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                For the Quarterly Period Ended September 30, 2005

                        Commission File Number 001-15977

                             TIGER TELEMATICS, INC.
             (Exact name of registrant as specified in its charter)

                  Delaware                                      13-4051167
     (State or other jurisdiction of                          (IRS Employer
     Incorporation or organization)                       Identification Number)

       550 Water Street, Suite 937
          Jacksonville, Florida                                   32202
(Address of principal executive offices)                        (Zip Code)

                                 (904) 279-9240
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ___ No X

Indicate by check mark  whether the  Registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). Yes  X    No
                                        -----    -----

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
                                                        Outstanding as of
Class                                                   September 30, 2005
---------------------------                             ------------------------
Common Stock, Par                                          63,254,811
Value $0.001 per share

<PAGE>

                                    CONTENTS
Part I                                                                      Page
                                                                            ----
Item 1.      Financial Statements

     Condensed Consolidated Balance Sheets                                    2

     Condensed Consolidated Statements of Operations for the
        nine months ended September 30, 2005 and 2004                         4

     Condensed Consolidated Statements of Operations for the
        three months ended  September 30, 2005 and 2004                       5

     Condensed Consolidated Statement of Stockholders' Deficiency             6

     Condensed Consolidated Statements of Cash Flows                          7

     Notes to Condensed Consolidated Financial Statements                     9

Item 2.     Management's Discussion and Analysis of Financial Condition
                and Results of Operations                                    19

Item 3.     Quantitative and Qualitative Disclosures About Market Risk       25

Item 4.     Controls and Procedures                                          25

Part II      Tiger Telematics, Inc. Other Information

Item 1.      Legal Proceedings                                               26

Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds     27

Item 3.      Defaults Upon Senior Securities                                 27

Item 4.      Submission of Matters to a Vote of Security Holders             27

Item 5.      Other Information                                               27

Item 6.      Exhibits                                                        28


Pursuant to Regulation S-X, prior to filing quarterly reports on Form 10-Q,
independent public accountants must review the interim financial statements
using professional standards and procedures for conducting such reviews, as
established by generally accepted auditing standards, as may be modified or
supplemented by the Securities and Exchange Commission.

The Company's independent public accountants, Goldstein Golub Kessler LLP,
declined to review the Company's financial statements as required by Regulation
S-X until an independent committee of the Company's Board of Directors completes
its investigation of certain related party transactions, including, but not
limited to, those transactions particularly described in Note F - Related Party
Transactions. Accordingly, the attached financial statements and this form 10Q
do not comply with the requirements of Regulation S-X.

                                       1
<PAGE>
<TABLE>
<CAPTION>

                     TIGER TELEMATICS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                    September 30, 2005 and December 31, 2004


                                                       Unaudited
                                                     September 30,    December 31,
                                                          2005            2004
                                                     -------------   -------------
<S>                                                  <C>             <C>
ASSETS
Current Assets
  Cash                                               $     363,316   $   4,653,559
  Accounts receivable                                    1,304,991         616,571
  Other receivables                                      5,463,948       3,129,235
  Inventories                                            2,995,267          38,532
  Advances to employees                                       --           204,081
  Deposits with suppliers                                8,668,379         924,456
  Prepaid expenses and other current assets              1,418,332         698,106
                                                     -------------   -------------

                 Total current assets                   20,214,233      10,264,540

Property and Equipment, net                              2,420,254         350,626
Assets held for sale                                     1,441,062         755,227
Other assets:
  Goodwill                                               5,038,416       3,975,670
  Other intangible assets                                1,905,865       1,901,765

  Minority interest                                         80,198            --
  Deferred tax asset, net of valuation
  allowance of $145,000,000 and $45,000,000
  in 2005 and 2004 respectively                               --              --
                                                     -------------   -------------

                                                     $  31,100,028   $  17,247,828
                                                     =============   =============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities
  Short term notes payable                           $  16,777,350   $        --
  Accounts payable                                      16,422,019      13,976,402
  Amount due stockholders                                  993,272         894,933
  Notes payable - Current portion                          262,657          78,937
  Accrued expenses                                      21,295,842       7,496,355
  Foreign tax accrual                                   39,664,637       7,567,352
  Deposits on common stock                                    --         1,871,730
  Contingent liabilities arising from discontinued
  operations                                             1,168,243       1,168,243
                                                     -------------   -------------

                 Total current liabilities              96,584,020      33,053,952

Notes payable after one year                               934,291         408,638
                                                     -------------   -------------

                 Total liabilities                      97,518,311      33,462,590
                                                     -------------   -------------

</TABLE>

                                       2
<PAGE>
<TABLE>
<CAPTION>

                       CONSOLIDATED BALANCE SHEETS (Cont.)
                    September 30, 2005 and December 31, 2004

                                                            Unaudited
                                                          September 30,     December 31,
                                                               2005             2004
                                                          -------------    -------------
<S>                                                       <C>              <C>
COMMITMENTS AND CONTINGENCIES

Stockholders' Deficiency
  Common stock - 0.001 par value, authorized
  500,000,000 shares. Issued and outstanding 63,254,811
  and 36,306,607 in 2005 and 2004 respectively                   63,255           36,307
  Additional paid-in-capital                                317,217,893      107,017,140
  Accumulated other comprehensive income (loss)               1,099,357       (3,112,766)
  Accumulated deficit                                      (384,798,788)    (120,155,443)
                                                          -------------    -------------

                 Stockholders' deficiency                   (66,418,283)     (16,214,762)
                                                          -------------    -------------

                                                          $  31,100,028    $  17,247,828
                                                          =============    =============
</TABLE>













                 See Notes to Consolidated Financial Statements

                                       3
<PAGE>
<TABLE>
<CAPTION>

                     TIGER TELEMATICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              For the nine months ended September 30, 2005 and 2004
                                    Unaudited



                                                        2005             2004
                                                   -------------    -------------
<S>                                                <C>              <C>
Net sales                                          $   2,838,221    $     451,924
Cost of goods sold                                     4,446,030          446,137
                                                   -------------    -------------

          Gross profit (loss)                         (1,607,809)           5,787
                                                   -------------    -------------

Operating expenses
   Selling expense                                    33,558,763        5,993,240
   General and administrative                        218,205,304       37,332,413
                                                   -------------    -------------

          Total operating expenses                   251,764,067       43,325,653
                                                   -------------    -------------

          Operating loss                            (253,371,876)     (43,319,866)
                                                   -------------    -------------

Other income (expense)
   Other                                                (170,024)          22,532
   Interest expense                                  (10,732,607)         (61,419)
   Loss on foreign currency transactions                (368,838)
                                                   -------------    -------------

                                                     (11,271,469)         (38,887)
                                                   -------------    -------------


                     Net loss                      $(264,643,345)   $ (43,358,753)
                                                   =============    =============


   Net loss per common share (basic and diluted)   $       (5.21)   $       (2.70)
                                                   =============    =============

   Weighted average shares outstanding - basic
   and diluted
                                                      50,756,359       16,032,697
                                                   =============    =============
</TABLE>





                 See Notes to Consolidated Financial Statements

                                       4
<PAGE>

                     TIGER TELEMATICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
             For the three months ended September 30, 2005 and 2004
                                    Unaudited


                                                       2005            2004
                                                   ------------    ------------

Net sales                                          $  1,278,022    $    268,095
Cost of goods sold                                    3,259,241         296,923
                                                   ------------    ------------

          Gross profit (loss)                        (1,981,219)        (28,828)
                                                   ------------    ------------

Operating expenses
   Selling expense                                    7,019,079       3,971,312
   General and administrative                        26,738,266      13,894,092
                                                   ------------    ------------

          Total operating expenses                   33,757,345      17,865,404
                                                   ------------    ------------

          Operating loss                            (35,738,564)    (17,894,232)
                                                   ------------    ------------

Other income (expense)

   Other                                                (99,672)          7,536
   Interest expense                                  (8,633,934)         (7,179)
   Loss on foreign currency exchange                    (66,589)
                                                   ------------    ------------

                                                     (8,800,195)            357
                                                   ------------    ------------


                      Net loss                     $(44,538,759)   $(17,893,875)
                                                   ============    ============


   Net loss per common share (basic and diluted)   $      (0.82)   $      (0.87)
                                                   ============    ============

   Weighted average shares outstanding
   (basic and diluted)                               54,215,238      20,571,366
                                                   ============    ============



                 See Notes to Consolidated Financial Statements

                                       5
<PAGE>
<TABLE>
<CAPTION>

                     TIGER TELEMATICS, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
                  For the nine months ended September 30, 2005
                                    Unaudited

                                                                              Accumulated
                                                               Additional        Other                             Total
                                      Common Stock              Paid-in      Comprehensive     Accumulated     Stockholders'
                                 Shares          Amount         Capital          Loss            Deficit         Deficiency
                             -------------   -------------   -------------   -------------    -------------    -------------
<S>                          <C>             <C>             <C>             <C>              <C>              <C>
Balance (deficiency)
December 31, 2004               36,306,607   $      36,307   $ 107,017,140   $  (3,112,766)   $(120,155,443)   $ (16,214,762)
                             =============   =============   =============   =============    =============    =============

Issuance of common stock:
   Private placement             4,986,856           4,987      63,570,864            --               --         63,575,851

   Stock based employee
      compensation               5,147,626           5,148      38,429,513            --               --         38,434,661
   Services                     13,896,863          13,896      89,868,697            --               --         89,882,593
   Interest on notes
payable                          2,200,000           2,200      10,766,800            --               --         10,769,000
  Acquisition of Globicom          116,859             117         538,603            --               --            538,720
  Contingent shares              4,176,000
    related to Indie
    acquisition                    600,000             600       4,175,400

Warrants issued to
    purchase 3,027,069
    shares of common stock            --              --         2,512,876            --               --          2,512,876
Repayment of personal
    expenses (Note F)                 --              --           338,000            --               --            338,000
Net Loss                              --              --              --      (264,643,345)    (264,643,345)    (264,643,345)

Other comprehensive
   income (loss) - foreign
   currency adjustment                --              --              --         4,212,123             --          4,212,123
                                                                             -------------
  Total comprehensive loss            --              --              --      (260,431,222)            --               --
                             -------------   -------------   -------------   -------------    -------------    -------------

Balance (deficiency)
September 30, 2005              63,254,811   $      63,255   $ 317,217,893   $   1,099,357    $(384,798,788)   $ (66,418,283)
                             =============   =============   =============   =============    =============    =============
</TABLE>



                 See Notes to Consolidated Financial Statements

                                       6
<PAGE>
<TABLE>
<CAPTION>

                     TIGER TELEMATICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the nine months ended September 30, 2005 and 2004
                                    Unaudited
                                                                    2005             2004
                                                               -------------    -------------
<S>                                                            <C>              <C>
Cash Flows from Operating Activities:

  Net loss                                                     $(264,643,345)   $ (43,358,753)
     Other comprehensive income                                    4,212,123           74,738
  Adjustments to reconcile net loss to net cash used
    in operating activities:
      Depreciation                                                   373,421          140,425
      Expenses paid with common stock                            143,262,254       11,837,342
      Impairment of goodwill                                          63,835           55,777
      Minority interest                                               (6,320)            --

  Changes in assets and liabilities:
      (Increase) in other accounts receivable                     (3,017,919)      (1,343,995)
      (Increase) in inventory                                     (2,943,466)            --
      Decrease (increase) in advances to employees                   204,081             --
      Decrease in deposits with suppliers                         (7,743,923)            --
      (Increase) in prepaid expenses                                (671,009)            --
      Increase in short term notes payable                        16,777,350             --
      Increase in accounts payable                                 2,292,916        6,512,675
      Increase in accrued expenses                                13,411,751        4,276,615
      Increase in foreign tax accrual                             32,097,285             --
      Other - net                                                       --           (214,740)
                                                               -------------    -------------
                   Net cash used in operating activities         (66,330,966)     (22,019,916)
                                                               -------------    -------------

Cash flows from investing activities:
      Purchase of property and equipment                          (2,437,967)        (463,789)
      Purchase of subsidiary                                        (198,184)        (850,281)
      Assets held for sale                                          (685,835)            --
                                                               -------------    -------------
                   Net cash used in investing activities          (3,321,986)      (1,314,070)
                                                               -------------    -------------

Cash flows from financing activities:
      Issuance of common stock and warrants                       66,426,727       16,372,458
      Loans and advances from stockholders                            98,339          120,909
      Proceeds from long term borrowing                              739,373             --
      Payments on debt                                               (30,000)         (35,915)
      Deposits on common stock                                    (1,871,730)       7,983,609
                                                               -------------    -------------
                   Net cash provided by financing activities      65,362,709       24,441,061
                                                               -------------    -------------
                                   Net change in cash             (4,290,243)       1,107,075
Cash:
  Beginning of period                                              4,653,559            8,959
                                                               -------------    -------------
  End of period                                                $     363,316    $   1,116,034
                                                               =============    =============

Supplemental disclosure of Cash Flow Information:
  Cash paid for interest                                       $     326,677    $      61,419
                                                               =============    =============


                                       7
<PAGE>

                  CONSOLIDATED STATEMENTS OF CASH FLOWS, cont'd
              For the nine months ended September 30, 2005 and 2004
                                    Unaudited

                                                                    2005             2004
                                                               -------------    -------------
Supplemental Disclosure of Non-cash Investing and
  Operating Activities: Stock issued for:
      Operating expenses                                       $  89,882,593    $  11,837,342
      Employee compensation                                       38,434,661             --
      Interest on notes payable                                   10,769,000             --
      Acquisition of Globicom                                        538,720             --
      Contingent consideration for Indie
         Studios acquisition                                       4,176,000             --
                                                               -------------    -------------
                                                               $ 143,800,974    $  11,838,342
                                                               =============    =============

  Financing Activities:
      Conversion of stockholder debt to common stock           $        --      $      55,000
                                                               =============    =============

  Investing Activities:
      Cash paid for subsidiary                                 $     200,000    $     850,281
      Common stock issued for acquisition                            538,720        2,832,800
      Liabilities in excess of assets acquired                       461,739          284,531
                                                               -------------    -------------
                                                               $   1,200,459    $   3,967,612
                                                               =============    =============


                                                                  Globicom       ISIS Models
Acquisitions:                                                  -------------    -------------
  Goodwill                                                         1,126,581    $   3,967,612
  Minority interest                                                   73,878             --
  Accounts receivable                                                  5,214          327,308
  Software EOM license                                                 4,100             --
  Inventory                                                           13,269             --
  Prepaid expenses & other assets                                     54,299           31,729
  Accounts payable                                                  (152,701)        (539,198)
  Due to related parties                                             (32,700)         (14,437)
  Accrued expenses                                                  (355,036)         (89,933)
  Cash & stock paid for subsidiary                                  (738,720)            --
  Common stock owed to sellers                                          --         (3,683,081)
                                                               -------------    -------------

        Cash received                                          $       1,816    $        --
                                                               =============    =============
</TABLE>



                 See Notes to Consolidated Financial Statements

                                       8
<PAGE>

                     TIGER TELEMATICS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - BASIS OF PRESENTATION

The condensed consolidated financial statements as of September 30, 2005 and for
the three month and nine month periods ended September 30, 2005 and 2004,
included herein have been prepared by the Company, without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to such rules
and regulations.

In the opinion of management, all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the financial
information for the periods indicated have been included. For further
information regarding the Company's accounting policies, refer to the
consolidated financial statements and related notes included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2004.

The preparation of financial statements in accordance with accounting principles
generally accepted in the U.S. requires management to make estimates and
assumptions that affect the amounts reported in our consolidated financial
statements and accompanying notes. Management bases its estimates on historical
experience and various other assumptions believed to be reasonable. Although
these estimates are based on management's best knowledge of current events and
actions that may impact the company in the future, actual results may be
different from the estimates

Pursuant to Regulation S-X, prior to filing quarterly reports on Form 10-Q,
independent public accountants must review the interim financial statements
using professional standards and procedures for conducting such reviews, as
established by generally accepted auditing standards, as may be modified or
supplemented by the Securities and Exchange Commission. The Company's
independent public accountants, Goldstein Golub Kessler LLP, declined to review
the Company's financial statements as required by Regulation S-X until an
independent committee of the Company's Board of Directors completes its
investigation of certain related party transactions including, but not
necessarily limited to, those transactions described in Note F - Related Party
Transactions. Accordingly, the attached financial statements and this Form 10Q
do not comply with the requirements of Regulation S-X.

The consolidated financial statements include the accounts of Tiger Telematics
("Tiger" or the "Company"), and its subsidiaries, Gizmondo Europe Ltd. and its
significant subsidiaries; ISIS Models Ltd. and Indie Studios AB. Other
subsidiaries of Tiger include Gizmondo USA, Inc., Smart Adds, Inc., Tiger
Telematics USA, Inc., Gizmondo Games Ltd, Gizmondo Studios AB, Gizmondo Studios
Texas, Gizmondo Studios Ltd (UK), Gizmondo Games Ltd (UK) and Globicom, Inc.
Intercompany obligations are not guaranteed by the Company unless expressly
agreed to by written agreement. Intercompany accounts and transactions have been
eliminated.

Certain balance sheet amounts at December 31, 2004 have been reclassified to
comply with the presentation adopted by the Company in 2005.

                                       9
<PAGE>

Going Concern:

The Company has sustained net losses aggregating over $382.5 million for the
three years and nine months ended September 30, 2005. In addition, the Company
had a net working capital deficiency of $76.4 million at September 30, 2005.
During those periods, the Company sold $121.3 million of restricted common stock
shares and, in order to conserve cash, the Company funded $178.3 million of the
losses by issuing restricted common stock in exchange for services and other
expenses. Management anticipates proceeds from sales of Gizmondo units and
accessories to increase significantly after the U. S. launch of the product on
October 22, 2005. Management also anticipates the ability to continue issuing
equity securities to meet working capital requirements and to fund development
costs incurred in connection with developing products that the Company believes
will enhance its operations. No assurances can be given that these funds will be
available. Additionally, the Company borrowed approximately $21.2 million from
shareholders on a short-term basis during the second quarter of 2005 (See Note
J).

The Company has instituted significant cost savings measures including: closing
unneeded facilities, reducing staff and instituting other cost savings measures.

The financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classifications of liabilities that might be necessary in the event the Company
cannot continue as a going concern.

Description of the business:

Tiger Telematics and its subsidiaries are principally engaged in the business of
developing and marketing the Gizmondo wireless handheld multi-entertainment
gaming device and related games and accessories associated with the Gizmondo.

The Company started Gizmondo Europe, Ltd. (formerly Tiger Telematics Europe
Ltd.) in late 2002 to focus on developing new telematics products including next
generation fleet telematics products and child tracker products.

In 2003, the Company began developing a new multi-entertainment wireless
handheld gaming device referred to as Gizmondo. While the Company previously
developed a variety of commercial telematics products, since early 2004 the
Company's primary business strategy has been to develop the Gizmondo. The
Company launched the full-scale production of Gizmondo in the UK in March 2005,
and on October 22, 2005 made a full-scale introduction to the US market. The
Gizmondo is powered by a Microsoft Windows CE.net platform, has a 2.8-inch TFT
color screen with a Samsung ARM9 400Mhz processor and incorporates the GoForce
3D 4500 NVIDIA graphics accelerator. Gizmondo provides cutting-edge gaming,
multimedia messaging, an MP3 music player, Mpeg4 movie playing capability, a
digital camera and a GPRS network link to allow wide-area network gaming.
Additionally, Gizmondo contains a GPS chip for location based services, is
equipped with Bluetooth for use in multi-player gaming and accepts MMC card
accessories. The Company's Games Studios develops new games and converts
existing games for use with the Gizmondo. The Gizmondo represents the Company's
primary business segment.

                                       10
<PAGE>

Valuation of Common Stock:

The shares of the Company's common stock issued primarily as payment for
services, employee bonuses and business acquisitions are restricted securities
and may not be currently sold. An independent business valuation expert
determines the "fair value" of these restricted securities on a quarterly basis.
Management believes that the appraised value is a better indication of the fair
value of the restricted shares issued than the price of freely traded shares in
the open market due to the large number of issued restricted shares.

Segment Information:

The Company primarily focuses all of its business in one segment, the
development, production, and sale of the wireless handheld multi-entertainment
gaming device, Gizmondo, and the related game products for use on the Gizmondo.

NOTE B - OTHER RECEIVABLES

Other receivables of $5.5 million and $3.1 million at September 30, 2005 and
December 31, 2004, respectively, consist primarily of VAT tax recoverable from
government agencies. At September 30, 2005 other receivables also includes $1.4
million due from Integra, a former acquisition candidate. The Company believes
that the receivable due from Integra is fully collectable based on the
collateral pledged to secure this loan. (See NOTE K - Contingencies)

NOTE C - EQUITY TRANSACTIONS

During the first nine months of 2005, the Company issued 26,948,204 shares of
restricted common stock in numerous private transactions with an aggregate value
of $207.4 million, all as more particularly described below:

         Sold 4,986,856 shares for $63.6 million in cash in private placement
         transactions with individual and institutional investors. The shares
         issued were sold at $3.50 to $20.00 per share.

         Issued 13,896,863 shares in payment of services (principally consulting
         type services) related to development of the Gizmondo. The shares were
         valued at from $4.31 to $7.92 per share, aggregating $89.9 million.

         Issued 2,200,000 shares valued at $10.8 million for interest on
         short-term notes payable. The shares issued were valued at $4.31 to
         $5.60 per share. (SEE NOTE J - SHORT TERM DEBT)

         Issued 600,000 shares valued at $4.2 million in connection with the
         successful completion of a product development project.

         The Company issued 5,147,626 shares to employees as compensation. The
         shares were valued at $4.31 to $7.92 per share and aggregated $38.4
         million. Of those shares, executives of the Company received 4,045,036
         shares valued at $27.9 million.

                                       11
<PAGE>

         Issued 116,859 shares of restricted common stock valued at $538.7
         thousand in connection with the acquisition of Globicom, Inc. (See
         NOTE N - ACQUISITIONS)

         In each case the Company recorded capital surplus based upon the fair
         value of the Company's common stock at the time of issuance or
         agreement to issue.

         Additionally, the Company issued warrants to purchase 3,027,069 shares
         of the Company's common stock valued at approximately $2.5 million,
         using the Black Scholes method. The value of the warrants was credited
         to paid in capital. (SEE NOTE J - SHORT TERM DEBT)

         Credited $338 thousand to paid in capital representing repayment by a
         former executive of personal expenses charged to the Company in a
         prior period. (SEE NOTE F - RELATED PARTY TRANSACTIONS)

NOTE D- REVERSE STOCK SPLIT

In July 2004, the Company's shareholders approved a 1 for 25 reverse stock
split. The number of authorized shares and par value were unchanged. All common
stock amounts described in this Form 10-Q have been adjusted to reflect this
change for all periods presented.

NOTE E - STOCK BASED COMPENSATION

The Company uses the intrinsic-value method of accounting for stock based
compensation. Under this method, compensation cost is the excess, if any, of the
fair value over the amount an employee must pay to acquire the stock at the date
of the grant. The Company generally grants options with an exercise price equal
to the market value of the common stock at the date of grant.

The Black-Scholes option price model was used to estimate the fair value as of
the date of grant using the following assumptions:

         Dividend yield                                                   0%
         Risk-free interest rates                                      4.35%
         Volatility                                                  163.00%
         Expected option term (years)                                  9.61
         Weighted-average fair value of options granted during
         the year                                                     $1.50

If the Company had determined compensation expense for the Plan based on the
fair value at the grant dates consistent with the method of SFAS No. 123 and
SFAS No. 148, the Company's pro-forma net loss and basic loss per share would
have been as follows:

                                       12
<PAGE>

                                         Nine Months Ended     Nine Months Ended
                                        September 30, 2005    September 30, 2004
                                        ------------------    ------------------
                                           (Thousands)            (Thousands)
                                           -----------            -----------

Net loss as reported                       $  (264,643)           $   (43,358)


Stock based compensation expense,
net of tax ($0) included in the
determination of net loss as reported      $   (38,434)           $        (0)

Stock based compensation expense
under the fair value based method,
net of tax ($0)                            $   (38,475)           $       (41)

Pro forma net loss                         $  (264,684)           $   (43,399)
Basic and diluted net loss per share,
as reported                                $     (5.21)           $     (2.70)
Pro forma basic and diluted net loss
per share                                  $     (5.21)           $     (2.70)

NOTE F - RELATED PARTY TRANSACTIONS

Advances to employees and stockholders of subsidiaries of the Company of $204
thousand at December 31, 2004 are due on demand, without interest.

The amount due to stockholders includes $0.9 million and $0.7 million at
September 30, 2005 and December 31, 2004, respectively, for back salary and
reimbursable expenses owed to the Company's CEO.

In September 2004, Northern Lights Software Limited ("Northern Lights"), a
company registered in the United Kingdom, and Gizmondo Europe entered into a
License Agreement, pursuant to which Northern Lights licensed the games, Chicane
and Colors, and provided software development services to Gizmondo Europe.
During 2004, Gizmondo Europe paid Northern Lights a total of $3.5 million under
the License Agreement, which amount was invoiced during the regular course of
business. Carl Freer, former Chairman of the Company's Board of Directors, and
Stefan Eriksson, a former executive officer of Gizmondo Europe, Ltd., were, at
the time of this transaction, directors of both Northern Lights and Gizmondo
Europe. Each was also the beneficial owner of 23.5% of the issued and
outstanding share capital of Northern Lights. The outstanding balance payable to
Northern Lights was $0.9 million at September 30, 2005 and December 31, 2004,
respectively. On September 29, 2005, Mr. Freer paid $3.5 million to or on behalf
of the Company, pending the determination of a special committee of independent
directors of the fairness of the transaction to the Company. The special
committee will be relying, in part, upon independent counsel and a fairness
opinion of independent financial experts.

In 2004 and the first quarter of 2005, Gizmondo Europe paid Anneli Freer, the
spouse of Mr. Freer, $116 thousand and $58 thousand, respectively, for
consultancy services provided to Gizmondo Europe. Mrs. Freer provided marketing
and public relations services, an introduction to the performer Sting and time
spent in connection with the creation of the "Agaju" gaming concept currently in
development. Mr. Freer reimbursed the Company for these entire amounts on
September 28, 2005. This amount was recorded as additional paid in capital upon
receipt.

                                       13
<PAGE>

In 2004, the Company paid $164 thousand to Bankside Law for legal fees incurred
on behalf of Mr. Freer, personally. The Company included this amount as
additional compensation to Mr. Freer. Mr. Freer reimbursed the Company for these
entire amounts on September 28, 2005. This amount was recorded as additional
paid in capital upon receipt.

During 2004, Mr. Freer and Mr. Eriksson entered into a multi-party transaction,
whereby they caused Asiatic Bank and Finance, a company registered in Panama
with its head office in Hong Kong, to pay $7.6 million that was previously owed
by Asiatic to Messrs. Freer and Eriksson, directly to 3P PreForm Marketing and
Research AB and other non-affiliated third parties in repayment of research and
development expenditures owed to these parties by Gizmondo Europe. Gizmondo
Europe then credited this amount in payment of amounts previously owed by Mr.
Freer and Mr. Eriksson to Gizmondo Europe. Asiatic Bank and Finance is also a
shareholder of the Company.

Gizmondo Europe maintains directors accounts whereby amounts owing to and from
directors of Gizmondo Europe are netted in order to facilitate advances made and
expenses incurred by directors. During 2004, Gizmondo Europe was owed as much as
$5.7 million, and $3.1 million, by Messrs. Freer and Eriksson, respectively.
Prior to his becoming a director of the Company in August 2004, all amounts owed
by Mr. Freer along with a portion of amounts owed by Mr. Eriksson were satisfied
by Asiatic in the transaction described in the preceding paragraph. As of
December 31, 2004, Mr. Eriksson owed $204 thousand to Gizmondo. These loans were
subsequently repaid in 2005. During 2005, Mr. Eriksson owed as much as $114
thousand to Gizmondo Europe, all of which has been repaid.

The transactions described above, involving Mr. Freer and Mr. Eriksson, were
consummated without the prior approval by the Company's Board of Directors. At
the time the Company had three directors, all of whom are involved in management
of the Company and its subsidiaries. On September 29, 2005, the Company
appointed three independent directors. Mr. Freer and Mr. Eriksson resigned on
October 20, 2005 as officers of Gizmondo Europe Ltd., and in Mr. Freer's case,
as a director of the Company.

With respect to the transactions in which Mr. Freer, Mrs. Freer and/or Mr.
Eriksson had an interest, the Company appointed two independent directors as a
special committee of the Board, authorized to retain independent counsel and
other experts and with their assistance investigate, review and determine the
fairness of these transactions and, if appropriate, initiate remedial actions.
The independent directors have retained Marshall & Stevens, a nationally
recognized independent valuation and appraisal-consulting firm, to assist in
valuing these transactions. That committee is currently conducting an active
review of the matters. Should this committee deem any such transaction(s)
inappropriate or unfair to the Company, they will be fully investigated and
remedial action taken accordingly.

NOTE G - INVENTORY

Inventories are stated at the lower of cost (specific identification basis) or
market, and consist of the following at September 30, 2005 and December 31,
2004:
                                                      2005         2004
                                                   ----------   ----------
         Electronic components                     $  274,173   $   38,532
         Finished goods                             2,638,543            0
         Supplies                                      82,551            0
                                                   ----------   ----------

         Total                                     $2,995,267   $   38,532
                                                   ==========   ==========

                                       14
<PAGE>

NOTE H - FOREIGN TAX ACCRUAL

The Company has accrued a UK Tax that may be levied based on the value of the
restricted common stock issued to employees as compensation. Management believes
the accrual is sufficient to pay any tax assessed plus interest and penalties.
To date no levy has been made.

NOTE I - LONG-TERM DEBT
                                                      2005         2004
                                                   ----------   ----------
The notes are payable to a bank in
equal monthly installments, with
interest ranging from 10.4% to 14% and
are collateralized by automobiles                  $1,196,948   $  487,575

Less amount due within one year                       262,657       78,937
                                                   ----------   ----------

Long term portion of notes payable                 $  934,291   $  408,638
                                                   ==========   ==========

Automobiles costing $1.4 million, classified as assets held for sale,
collateralize loans with unpaid balances of approximately $930 thousand. The
loans are payable in monthly installments over five years through January 2009.

NOTE J - SHORT TERM DEBT

In May 2005, two entities that are shareholders of the Company provided an
aggregate total of approximately $21.2 million in two separate short-term loans
to Gizmondo Europe. One of the loans was payable on October 31, 2005 and the
other is due on November 30, 2005. The Company is currently negotiating with the
lenders for an extension on both loans. There can be no assurance that the loans
will be extended. Mr. Freer and Mr. Eriksson personally guaranteed the loans.
The Company also pledged 1,027,069 shares of its common stock as collateral for
the loans.

During the second and third quarter of 2005, as payment for interest and loan
fees related to the short term loans described above, the Company (i) issued 2.2
million shares of its restricted common stock valued at approximately $10.8
million, and (ii) granted warrants to purchase 3,027,069 shares of the its
restricted common stock for $8.00 per share. The warrants are valued at
approximately $2.5 million. The warrants are exercisable at any time and expire
as follows: December 31, 2005 - 1,027,069 shares; December 31, 2006 - 2,000,000
shares.

The total value of shares and warrants issued aggregates approximately $13.3
million. Interest expense was amortized over the term of the notes through
October 31, 2005. Interest expense of $10.8 million was recorded through
September 30, 2005. Prepaid interest of approximately $2.9 million was netted
against the note payable. The note balance as shown at September 30, 2005 is net
of prepaid interest and a favorable foreign currency adjustment.

NOTE K - CONTINGENCIES

In August 2005, the Company filed an action against Integra SP Holdings Limited
and Integra SP Nominee Limited (collectively "Integra") seeking a declaratory
judgment that the Company had properly terminated a stock purchase agreement
between the Company and Integra. In November 2004, the Company entered into an

                                       15
<PAGE>

agreement with Integra to acquire all of the outstanding share capital of
Integra SP Holdings Limited for Company common stock with a market value of
approximately $35 million based on $14.06 per share. The agreement, which was
amended in January 2005, required the satisfaction of numerous conditions in
order to close. Several of those conditions were not satisfied and on July 7,
2005, the Company notified Integra that it had elected to terminate the
agreement. In connection with entering into the agreement the Company had also
loaned Integra approximately $1.4 million under a debenture providing for loans
by the Company of up to $1.9 million, secured by Integra's intellectual property
rights. Termination of the stock purchase agreement entitles the Company to
demand payment on the debenture with 60 days notice, which the Company did on
July 7, 2005. The loan with a balance of $1.4 million is included as other
receivables. The Company considers this loan to be recoverable given the value
of the collateral securing this loan.

On August 19, 2005, Ogilvy Group Sweden Limited ("Ogilvy") commenced an action
against Gizmondo Europe Limited in the Stockholm District Court to collect
approximately $4.1 million plus interest allegedly owed to Ogilvy for marketing
and advertising services provided to Gizmondo Europe during 2003 and 2004.
Gizmondo Europe's relationship with Ogilvy was terminated on June 30, 2005.
Pursuant to a Securities Lending Agreement, the Company issued 400,000 shares of
its common stock to Ogilvy as collateral for Gizmondo Europe's obligations to
Ogilvy. On October 3, 2005, Ogilvy filed an action against the Company and
Gizmondo Europe in the U. S. District Court, Southern District of New York, to
recover the amounts described above based on alleged defaults under the
Securities Lending Agreement.

On August 29, 2005, an affiliate of Ogilvy, Ogilvy Public Relations Worldwide,
Inc. ("Ogilvy PR"), commenced an arbitration proceeding in New York City against
Gizmondo Europe and the Company to collect approximately $305 thousand plus
interest allegedly owed to Ogilvy PR for public relations services under an
agreement dated June 30, 2004. On September 20, 2005, the Company and Ogilvy PR
settled this dispute for $25 thousand in cash paid by the Company and the entry
of a judgment in the amount of $131 thousand.

On September 2, 2005, MTV Networks Europe demanded payment of $1.5 million
previously invoiced to Gizmondo Europe under an agreement dated March 31, 2005
with Gizmondo Europe guaranteed by the Company. The agreement provides for
sponsorship fees of $2.6 million plus VAT and airtime advertising fees of $2.6
million. MTV Networks Europe has terminated the agreement effective September 9,
2005, reserving its right to bring legal proceedings for payment of the
outstanding invoices and damages for lost profits resulting from termination of
this agreement.

Early in the third quarter of 2005, HandHeld Games, Inc. filed suit against the
Company for damages and costs in excess of $200 thousand as a result of a
dispute between the Company and HandHeld Games over a game development contract
for the game "Chicane". HandHeld Games subsequently advised the Company that its
claim exceeds $900 thousand.
The suit is in the discovery stages, but the Company believes it has meritorious
defenses and does not expect the outcome of the matter to have a material effect
on the financial condition of the Company.

On October 18, 2005, Mr. Joe Marten, previously a Director of Gizmondo Europe
Ltd., demanded payment of $740 thousand that he maintains the Company owes him.
Although the Company carries the obligation as a payable to other creditors, it
denies that the sum is owed to him due to an offset against other obligations
Mr. Marten owes the Company.

                                       16
<PAGE>
<TABLE>
<CAPTION>

In October 2004, Gizmondo Europe Ltd, (Gizmondo), a subsidiary of the Company
signed a contract with SCi Entertainment Group Plc (SCi), a leading games
publisher, under which Gizmondo has licensed the right to develop and publish
twelve SCi products for the Gizmondo platform. The agreement covers both
currently released titles as well as those in the pipeline, and establishes the
structure for continuing collaboration between the two companies. The agreement
has Gizmondo paying a minimum guarantee of approximately $1.3 million allocated
by and among 12 products. The guarantee, which has been paid, is non-refundable
but fully recoverable against earned royalties of each product. An earned
royalty of 5% of net receipts is to be paid on each product.

NOTE L - WARRANTS

---------- ----------- ---------- ------------- ---------------- --------------- -----------

 Date of    Number of   Exercise                    Expiration       Expired/
  Grant      Shares       Price    Exercisable         Date         Exercised      Balance
---------- ----------- ---------- ------------- ---------------- --------------- -----------
<S>        <C>         <C>        <C>           <C>              <C>             <C>
 Sept 30,     250,000     $5.00    Immediately   Sept. 30, 2009       None         250,000
  2004
---------- ----------- ---------- ------------- ---------------- --------------- -----------
  June        245,525    $11.25    Immediately    September 30,       None         245,525
  2004                                                2006
---------- ----------- ---------- ------------- ---------------- --------------- -----------
                                                                   Balance at
                                                                  December 31,
                                                                      2004         495,525
---------- ----------- ---------- ------------- ---------------- --------------- -----------
   May      1,027,069    $8.00     Immediately     December 31,       None        1,027,069
   2005                                               2005
---------- ----------- ---------- ------------- ---------------- --------------- -----------
   June     2,000,000    $8.00     Immediately     December 31,       None        2,000,000
   2005                                               2006
---------- ----------- ---------- ------------- ---------------- --------------- -----------
                                                                   Balance at
                                                                  September 30,
                                                                      2005        3,522,594
---------- ----------- ---------- ------------- ---------------- --------------- -----------
</TABLE>

No warrants were outstanding at January 1, 2004.


NOTE M - SUBSEQUENT EVENTS

In October 2005 the Company paid $400,000 to Electronic Arts as the first
installment of a $3.9 million arrangement for a yet to be announced game. The
balance of the $3.9 million is due when the Company decides to go forward with
development of the game.

Payments of $3.9 million have been made to Games Factory Publishing Ltd in
connection with a games development agreement entered into in August 2005 for
the development of 19 games to be used on the Gizmondo handheld device. A 50%
shareholder of Games Factory Publishing Ltd owns 100,000 shares of the Company's
common stock. In October 2005, the Company exercised a withdrawal provision in
the agreement due to a delay in game delivery and received a reimbursement of
$2.5 million and a commitment from Games Factory Publishing Ltd to pay the
remaining $1.4 million.

                                       17
<PAGE>

NOTE N - ACQUISITIONS

On September 8, 2005, the Company executed a Stock Purchase Agreement with
certain stockholders of Globicom, Inc. (Globicom), a Texas corporation, and
closed the transaction on that date, for the acquisition of approximately
eighty-four percent (84%) of the issued and outstanding common stock of
Globicom, Inc.

The Company acquired Globicom in a move to provide wireless network support and
expand the wireless infrastructure for Gizmondo. The Company paid $200,000 in
cash and issued 116,859 shares of its restricted common stock valued at
$538,720. The Company also assumed liabilities in excess of the value of
tangible assets acquired of $461,739. The excess of purchase price over the
value of the tangible assets acquired of $1,200,459 was assigned to Goodwill. An
additional contingent cash payment of $120,000 is due upon the completion of
certain milestones.

Globicom has no operations in 2004, no revenues from inception to the date of
acquisition and no revenues from the date of acquisition through September 30,
2005. The following proforma information reflects the net sales, net loss, and
per share amounts for the first nine months of 2005 and 2004 as if the Company
had made the acquisitions on January 1, 2004.

                                        September 30,    September 30,
                                        -------------    -------------
                                             2005             2004
                                             ----             ----

Pro forma net sales                     $   2,838,221    $   1,444,000

Pro forma net loss                       (264,700,940)     (43,935,000)

Pro forma  basic and diluted net loss           (5.20)          ($2.48)
per common share

Weighted  average shares  outstanding      50,873,218       17,687,422
- basic and diluted

Goodwill represents the excess of the cost of an acquisition over the fair value
of the net assets acquired. The Company tests goodwill and other intangible
assets on an annual basis, or more frequently if events or circumstances
indicate that there may have been impairment. The goodwill impairment test
estimates the fair value of each reporting unit, through the use of a discounted
cash flows model, and compares this fair value to the reporting unit's carrying
value. The goodwill impairment test requires management to make judgments in
determining the assumptions used in the calculations. Management believes
goodwill is not impaired and is properly recorded in the financial statements.

                                       18
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

This report contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 23E of the Securities
Act of 1934, as amended. These statements relate to future events or future
financial performance. Any statements contained in this report that are not
statements of historical fact may be deemed to be forward-looking statements and
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. In some cases, forward-looking statements can be
identified by terminology such as "may," "will," "should," "expect," "plan,"
"anticipate," "intend", "believe," "estimate," "predict," "potential" or
"continue," or the negative of such terms or other comparable terminology. These
statements are only predictions. Actual events or results may differ materially.

Investors are cautioned that these forward-looking statements reflect numerous
assumptions and involve risks and uncertainties that may affect the Company's
business and prospects and cause actual results to differ materially from these
forward-looking statements. Among the factors that could cause actual results to
differ are the Company's operating history; competition; low barriers to entry;
reliance on strategic relationships; rapid technological changes; inability to
complete transactions on favorable terms; consumer demand for video game
hardware and software; the timing of the introduction of new generation
competitive hardware systems; pricing changes by key vendors for hardware and
software and the timing of any such changes, and the adequacy of supplies of new
software products.

Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, the Company cannot guarantee future
results, levels of activity, performance or achievements. Moreover, neither the
Company, nor any other person or entity, assumes responsibility for the accuracy
and completeness of the forward-looking statements. The Company is under no
obligation to update any of the forward-looking statements after the filing of
this Form 10-Q to conform such statements to actual results or to changes in the
Company's expectations.

The following discussion should be read in conjunction with the Company's
financial statements, related notes and the other financial information
appearing elsewhere in this Form 10-Q.

General Overview

In early 2003, the Company began developing a new multi-entertainment wireless
handheld gaming device that is now referred to as Gizmondo. Since then the
Company's primary business strategy has been to develop and market Gizmondo. The
Company initially launched a limited production version of the Gizmondo in the
UK on March 19, 2005, and, on October 22, 2005, launched the full-scale
production of Gizmondo selling in the U.S. market. The Gizmondo is powered by a
Microsoft Windows CE.net platform, has a 2.8-inch TFT color screen and a Samsung
ARM9 400Mhz processor and incorporates the GoForce 3D 4500 NVIDIA graphics
accelerator. Gizmondo provides cutting-edge gaming, multimedia messaging, an MP3
music player, Mpeg4 movie playing capability, a digital camera and a GPRS
network link to allow wide-area network gaming. Additionally, Gizmondo contains
a GPS chip for location based services, is equipped with Bluetooth for use in
multi-player gaming and accepts MMC card accessories.

                                       19
<PAGE>

Nine months-ended September 30, 2005 compared to the nine months ended September
30, 2004:

Net Sales: The Company's net sales were $2.85 million and $452 thousand for the
nine months ended September 30, 2005 and 2004 respectively. Sales of Gizmondo
product in 2005 aggregated $1.7 million as the Company began selling its
Gizmondo products in the United Kingdom. No Gizmondo sales were recorded in
2004. In both periods the Company has focused and will continue to focus its
full attention to the development of the Gizmondo device.

Gross Profits: The Company's gross profit (loss) was $(1.6 million) and $6
thousand for the nine month periods ended September 30, 2005 and 2004. Sales of
the Gizmondo device began in 2005. Included in cost of goods sold are amounts
for "give-aways" and promotional units for which no sale is recorded. This
distorts the gross profit number on a per unit basis. Therefore, unit costs are
excessive and reflect the high costs associated with minimal sales levels as the
company prepares for higher volumes in the future where promotional units will
reflect a lower percentage of total units. Gross profit or (loss) at this sales
level is not a meaningful measure.

Selling Expenses: Selling and marketing expenses for the nine months ended
September 30, 2005 were $33.6 million compared with $6 million for the same
period in 2004. Most of the increase can be attributed to the launch of the
Gizmondo device in Europe and preparing for the launch in the United States that
occurred on October 22, 2005. Direct advertising expenses aggregated $2.1
million in 2005 as compared to $ 100 thousand in the first nine months of 2004.
Sales promotion activities aggregated $25.7 million in 2005 compared to $5
million for the same period in 2004. Additional expenses were incurred during
2005 to recruit distributors and representatives in various market regions.

General and Administrative Expenses: General and administrative expenses for the
nine months ended September 30, 2005 were $218.2 million compared to $37.3
million in 2004, an increase of over $180.9 million. This increase came
primarily from expenses related to development of the Gizmondo device. The
Company incurred over $18.8 million in research and development costs directly
attributable to the Gizmondo in 2005 as compared to approximately $12.5 million
in 2004. All of these costs are expensed as incurred and are not capitalized for
financial reporting purposes. In addition, salaries and related costs rose to
over $89.6 million in 2005 from $4.9 million in 2004 as the Company continued in
the product development phase and awarded significant stock bonuses directly
related to the launch of the Gizmondo product during 2005. The Company also
incurred over $113 million of legal, accounting and consulting costs in the
first nine months of 2005, up from $11.8 million in 2004, as consultants were
engaged to assist the Company in activities related to the development and 2005
launch of the Gizmondo. Most of this expense was paid for by issuing shares of
the Company's restricted common stock.

Interest expense: Interest expense totaled over $10.7 million from $61 thousand
during the first nine months of 2005 and 2004, respectively. The major part of
the increase relates to interest paid on short-term loans. The interest was paid
by issuing shares of the Company's common stock and issuing warrants to purchase
additional shares in the future.

Net Loss: The Company reported a net loss of $264.6 million for the nine-month
period ended September 30, 2005 compared to $43.4 million for the same time
period in 2004. $143.2 million of this loss was the non-cash cost of issuing
shares for services, goods and interest. The aforementioned costs associated
with the development of Gizmondo account for this material increase in operating
loss.

                                       20
<PAGE>

Three months-ended September 30, 2005 compared to the three months ended
September 30, 2004:

Net Sales: The Company's net sales were $1.3 million for the three months ended
September 30, 2005 and $268 thousand for the three months ended September 30,
2004. The Company began selling its Gizmondo products in the United Kingdom in
2005. Sales of Gizmondo product in the quarter ended September 2004 were zero.
In both quarters the Company has focused and will continue to focus its full
attention to the development and sale of the Gizmondo device.

Gross Profits: The Company's gross profit (loss) was $(2 million) and $29
thousand for the periods ended September 30, 2005 and 2004. Sales of the
Gizmondo device began in 2005 and only minor sales amounts have been recorded.
Included in cost of goods sold are amounts for "give-aways" and promotional
units for which no sale is recorded. This distorts the gross profit number on a
per unit basis. Therefore, unit costs are excessive and reflect the high costs
associated with minimal sales levels as the company prepares for higher volumes
in the future where promotional units will reflect a lower percentage of total
units. Gross profit or (loss) at this sales level is not a meaningful measure.

Selling Expenses: Selling and marketing expenses for the three months ended
September 30, 2005 were $7.0 million compared with $4.0 million for the same
time period in 2004. Most of the increase can be attributed to moving towards
the launch of the Gizmondo device in Europe and the United States in the fourth
quarter of 2005. Direct advertising expenses aggregated $389 thousand in 2005 as
compared to $ 6 thousand in the three months ended September 30, 2004. Sales
promotion activities aggregated $12.8 million in 2005 compared to $1.1 million
for the same period in 2004. Additional expenses were incurred in recruiting
various distributors and representatives in various market regions prior to the
Gizmondo launch.

General and Administrative Expenses: General and administrative expenses for the
three months ended September 30, 2005 were $26.7 million compared to $13.9
million for 2004, or up approximately over $12.8 million. This increase came
primarily from expenses related to development of the Gizmondo device. The
Company incurred over $4.8 million in research and development costs directly
attributable to the Gizmondo in 2005 as compared to approximately $8.0 million
in 2004. All of these costs are expensed as incurred and are not capitalized for
financial reporting purposes. In addition, salaries and related costs rose to
over $6.6 million in 2005 from $1.5 million in 2004 as the Company continued in
the product development phase and awarded significant stock bonuses related to
the launch of the Gizmondo product. The Company also incurred over $22 million
of legal, accounting and consulting costs in the third quarter of 2005, up from
$16.5 million in 2004, as consultants were engaged to assist the Company in
activities related to the development and launch of the Gizmondo. Most of this
sum is from the issuance expense from shares of common stock. In the three month
period ended September 30, 2005, approximately $21.9 million of the above costs
was paid by issuance of the Company's restricted common stock.

                                       21
<PAGE>

Interest expense: Interest expense rose to $8.6 million from $7 thousand during
the quarters ended September 30, 2005 and 2004 respectively. The major part of
the increase relates to interest paid on short-term loans. The interest was paid
by issuing shares of the Company's common stock and issuing warrants to purchase
additional shares in the future.

Net Loss: The Company reported a net loss of $44.5 million for the quarter ended
September 30, 2005 compared to $17.9 million for the same time period in 2004.
The aforementioned costs associated with the development and sales of Gizmondo
account for this material increase in operating loss.

Liquidity and Capital Resources

The Company does not have any off-balance sheet arrangements..

The Company has funded its operations principally through private placements of
its common stock to accredited foreign investors aggregating over $121.3 million
in cash, and the issuance of common stock in exchange for goods and services
aggregating over $178 million since 2002 through September 30, 2005. During 2004
the Company's working capital deficit increased from $8,800,000 to over
$22,800,000 at December 31, 2004, and by the end of the third quarter of 2005
the working capital deficit had increased to over $76 million. Accounts payable,
accrued expenses and foreign tax accrual have increased by over $48.3 million
while current assets increased just over $10 million. Without such funding, the
Company would not have been able to sustain operations.

The Company has used funds to support the ramp up of the business to begin
product sales in North America in October 22, 2005. As of September 30, 2004
inventories had increased to $3 million from $39 thousand at the end of 2004 and
deposits with suppliers (which represents prepayments for Gizmondo's and
accessories) increased to $8.7 million from $0.9 million at year end 2004. These
two accounts combined, reflect that over $11.6 million is in prepaid product to
be sold in 4th quarter 2005 or later.

From July 1, 2005 through September 30, 2005 the Company obtained additional
equity capital of over $48 million in cash and services. The Company will seek
to raise additional equity capital and will seek trade or bank financing as
needed to fund the development and the launch of the Gizmondo product in
different regions as needed. Management anticipates that it can continue to
raise equity capital through private placements of its common stock. However,
there can be no assurance that any future capital or other financing will be
available, or if available on terms reasonably acceptable to the Company.

In May 2005, two corporate entities that are shareholders of the Company
provided an aggregate total of approximately $21.2 million in two separate
short-term loans to Gizmondo Europe. The loans were payable on October 31, 2005.
One of the lenders agreed to extend the maturity date of one loan to November
30, 2005, and the Company anticipates that the other lender will extend the
maturity date of the other loan to November 30, 2005. Mr. Freer and Mr. Eriksson
personally guaranteed the loans. The Company also pledged 1,027,069 shares of
its common stock as collateral for the loans. (SEE NOTE J - SHORT TERM DEBT)

In October 2005 the Company cancelled the Game Factory Publishing LTD
arrangement (See Note M - Subsequent Events) that generated $2.5 million in cash
and a commitment from Games Factory Publishing Ltd to pay the remaining $1.4
million.

                                       22
<PAGE>

The Company obtained liquidity from its CEO who has deferred his salary and
reimbursable expenses aggregating over $900,000 as of September 30, 2005. The
Company has instituted significant cost savings measures including: closing
unneeded facilities, reducing staff and instituting other cost savings measures.

Management also anticipates the continued issuance of equity securities to meet
working capital requirements. Future operations remain dependent upon such
equity financing being available to support the operations until a critical mass
of product sales can be achieved.

Critical Accounting Policies
The preparation of financial statements in accordance with accounting principles
generally accepted in the U.S. requires management to make estimates and
assumptions that affect the amounts reported in our consolidated financial
statements and accompanying notes. Management bases its estimates on historical
experience and various other assumptions believed to be reasonable. Although
these estimates are based on management's best knowledge of current events and
actions that may impact the company in the future, actual results may be
different from the estimates. Our critical accounting policies are those that
affect our financial statements materially and involve difficult, subjective or
complex judgments by management. Those policies are stock-based compensation,
income taxes, goodwill impairment and revenue recognition.

Stock-Based Compensation
------------------------

We have chosen to account for stock options granted to employees and directors
under the recognition and measurement principles of Accounting Principles Board
Opinion No. 25 instead of the fair value recognition provisions of SFAS No. 123,
"Accounting for Stock-based Compensation," as amended by SFAS No. 148,
"Accounting for Stock-based Compensation Transition and Disclosure."

In addition, the Company has routinely exchanged shares of its common stock for
employee compensation and services and in satisfaction of debt owed by the
Company to shareholders. Common stock exchanged for services from employees and
unrelated parties, shareholder debt and suppliers is valued at the appraised
value of the Company's restricted common stock. Differences between the
appraised value and the stated value of services or debt are charged to
operations.

The shares issued are restricted securities and may not be currently sold. An
independent business valuation expert determines the value of these restricted
securities on a quarterly basis. Management believes that the appraised value is
a better indication of the fair value of the restricted shares issued than the
price of freely traded shares in the open market due to the large number of
issued restricted shares.

Income Taxes
------------

The calculation of the Company's income tax provision and related valuation
allowance is complex and requires the use of estimates and judgments in its
determination. As part of the Company's evaluation and implementation of
business strategies, consideration is given to the regulations and tax laws that
apply to the specific facts and circumstances for any transaction under
evaluation. This analysis includes the amount and timing of the realization of
income tax liabilities or benefits. Management closely monitors tax developments
in order to evaluate the effect they may have on the Company's overall tax
position.

                                       23
<PAGE>

Impairment of Goodwill and Other Intangible Assets
--------------------------------------------------

Goodwill represents the excess of the cost of an acquisition over the fair value
of the net assets acquired. The Company tests goodwill and other intangible
assets on an annual basis, or more frequently if events or circumstances
indicate that there may have been impairment. The goodwill impairment test
estimates the fair value of each reporting unit, through the use of a discounted
cash flows model, and compares this fair value to the reporting unit's carrying
value. The goodwill impairment test requires management to make judgments in
determining the assumptions used in the calculations. Management believes
goodwill is not impaired and is properly recorded in the financial statements.

Revenue Recognition
-------------------

The Company enters into agreements to sell products (hardware or software),
services, and other arrangements that include combinations of products and
services. Revenue from product sales, net of trade discounts and allowances, is
recognized provided that persuasive evidence of an arrangement exists, delivery
has occurred, the price is fixed or determinable, and collectibility is
reasonably assured. Delivery is considered to have occurred when title and risk
of loss have transferred to the customer. Revenue is reduced for estimated
product returns and distributor price protection, when appropriate. For sales
that include customer-specified acceptance criteria, revenue is recognized after
the acceptance criteria have been met. Revenue from services is deferred and
recognized over the contractual period or as services are rendered and accepted
by the customer. When arrangements include multiple elements, we use objective
evidence of fair value to allocate revenue to the elements and recognize revenue
when the criteria for revenue recognition have been met for each element. The
amount of product revenue recognized is affected by our judgments as to whether
an arrangement includes multiple elements and if so, whether vendor-specific
objective evidence of fair value exists for those elements. Changes to the
elements in an arrangement and the ability to establish vendor-specific
objective evidence for those elements could affect the timing of the revenue
recognition. Most of these conditions are subjective and actual results could
vary from the estimated outcome, requiring future adjustments to revenue.

Research and Development
------------------------

The Company expenses research and development costs as incurred.




                                       24
<PAGE>


Item 3.       Quantitative and Qualitative Disclosures About Market Risk:

Market risks relating to the Company's operations result primarily from changes
in foreign currency exchange rates. The Company has non-cash foreign currency
exchange gain/loss exposure from fluctuations in foreign currency exchange rates
as a result of certain receivables and payable balances. The primary currency
exchanges the Company has exposure to are the European euro and the British
pound sterling. The Company does not currently use foreign exchange forward
contracts to hedge against its foreign currency exposure, nor does it intend to
do so in the foreseeable future.

Item 4.       Controls and Procedures:

In August 2005, the Company began a remediation program to correct the
deficiencies noted in Management's Report on Internal Control over Financial
Reporting in the Company's Annual Report on Form 10-K for the year ended
December 31, 2004. The Company retained BDO Stoy Hayward LLP to assist in
preparing a remediation plan. The plan was developed in October 2005 and is
currently in the design and implementation phase. The Company is planning to
remediate all of the areas of deficiency on a design basis prior to December 31,
2005, although this may not be completed before March 31, 2006. For additional
information regarding Management's Report on Internal Control over Financial
Reporting, see the Company's Annual Report on Form 10-K for the year ended
December 31, 2004.












                                       25
<PAGE>

                                     PART II
                             TIGER TELEMATICS, INC.
                                OTHER INFORMATION

Item 1.       Legal Proceedings:

In August 2005 the Company filed an action against Integra SP Holdings Limited
and Integra SP Nominee Limited (collectively "Integra") seeking a declaratory
judgment that the Company had properly terminated a stock purchase agreement
between the Company and Integra. In November 2004 the Company entered into an
agreement with Integra to acquire all of the outstanding share capital of
Integra SP Holdings Limited for Company common stock with a market value of
approximately $35 million based on $14.06 per share. The agreement, which was
amended in January 2005, required the satisfaction of numerous conditions in
order to close. Several of those conditions were not satisfied and on July 7,
2005, the Company notified Integra that it had elected to terminate the
agreement. In connection with entering into the agreement the Company had also
loaned Integra $1.5 million in 2005 under a debenture providing for loans by the
Company of up to $1.9 million, secured by Integra's intellectual property
rights. Termination of the stock purchase agreement entitles the Company to
demand payment on the debenture with 60 days notice, which the Company did on
July 7, 2005. The action was filed in Florida State Court and has been removed
by Integra to the U.S. District Court, Middle District of Florida, Jacksonville
Division. On October 13, 2005, Integra filed a motion for preliminary injunction
seeking the return of certain property held by the Company as collateral for the
debenture. On October 31, 2005, the Company filed a response to Integra's motion
for preliminary injunction. A hearing on this motion was scheduled for November
10, 2005. On November 9, 2005 the parties agreed that the Company would retain
possession of all collateral pending resolution of the action and Integra
withdrew its motion for preliminary injunction.

On August 19, 2005, Ogilvy Group Sweden Limited ("Ogilvy") commenced an action
against Gizmondo Europe Limited in the Stockholm District Court to collect
approximately $4.1 million plus interest allegedly owed to Ogilvy for marketing
and advertising services provided to Gizmondo Europe during 2003 and 2004.
Gizmondo Europe's relationship with Ogilvy was terminated on September 30, 2005.
Pursuant to a Securities Lending Agreement, the Company issued 400,000 shares of
its common stock to Ogilvy as collateral for Gizmondo Europe's obligations to
Ogilvy. On October 3, 2005, Ogilvy filed an action against the Company and
Gizmondo Europe in the U. S. District Court, Southern District of New York, to
recover the amounts described above based on alleged defaults under the
Securities Lending Agreement.

On August 29, 2005, an affiliate of Ogilvy, Ogilvy Public Relations Worldwide,
Inc. ("Ogilvy PR"), commenced an arbitration proceeding in New York City against
Gizmondo Europe and the Company to collect approximately $305 thousand plus
interest allegedly owed to Ogilvy PR for public relations services under an
agreement dated September 30, 2004. The agreement was terminated in December
2004. On September 20, 2005, the Company and Ogilvy PR settled this dispute for
$25 thousand in cash and entry of a judgment in the amount of $131 thousand.

Early in the third quarter of 2005, HandHeld Games, Inc. filed suit against the
Company for damages and costs in excess of $200 thousand as a result of a
dispute between the Company and HandHeld Games over a game development contract
for the game "Chicane". HandHeld Games subsequently advised the Company that its
claim exceeds $900 thousand. The suit is in the discovery stages, but the
Company believes it has meritorious defenses and does not expect the outcome of
the matter to have a material effect on the financial condition of the Company.

                                       26
<PAGE>

Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds:

Previously reported on form 8K

Item 3.       Defaults Upon Senior Securities:

Not Applicable

Item 4.       Submission of Matters to a Vote of Security Holders:

Not Applicable

Item 5.       Other Information:

As reported in the Company's Form 8-K filed on October 20, 2005, Mr. Carl Freer
resigned as Chairman of the Board and as a Director of the Company, as Managing
Director of Gizmondo Europe, Ltd. and as an officer and employee of all other
subsidiaries of the Company. Further, Mr. Stefan Eriksson resigned as an officer
and employee of Gizmondo Europe, Ltd. and as an officer and employee of all
other subsidiaries of the Company. Effective October 20, 2005 Mr. Peter Uf
resigned as a director of Gizmondo Europe, Ltd. and as an officer and director
of all other subsidiaries of the Company. Messrs. Freer, Eriksson and Uf are no
longer affiliated with the Company or its subsidiaries, other than as
shareholders of the Company.

Since their resignations, Messrs. Freer, Eriksson and Uf have been the subject
of several articles published in Sweden reporting alleged questionable
activities and association with a Swedish crime family and, in the case of
Messrs. Eriksson and Uf, prior convictions for fraud and other economic crimes.
Mr. Freer has advised the Company that the allegations and implications of
illegal activities or improprieties attributed to him are not true and that he
intends to file suit against the newspapers. Prior to these reports, the Company
had no prior knowledge of the past history described in these reports. The
Company conducts background checks of all of its senior executives. The
background checks did not reveal these convictions or other illegal activities.

As stated in the Company's recent 10-K and in the related party note of this
Form 10-Q, all transactions involving Messrs. Freer or Eriksson since January 1,
2004 are subject to review by a committee of independent directors. That
committee is currently conducting an active review of the matters. Should any
transactions be deemed inappropriate or unfair to the Company by this committee,
they will be fully investigated and remedial action taken accordingly.





                                       27
<PAGE>

Item 6.       Exhibits:

Exhibit 31  Rule 13a-14(a).
Exhibit 32  Section 1350 Certification.





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Quarterly Report on Form 10-Q to be signed on
its behalf by the undersigned, thereunto duly authorized.

TIGER TELEMATICS, INC.


/S/  Michael W. Carrender
-------------------------
Michael W. Carrender
Chief Executive Officer, Director and Chief
  Financial Officer

November 30, 2005







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